Sukhwinder Singh vs Jagroop Singh & Anr.

03.01.04 executed by defendant no.1 (respondent no.2) in favour of plaintiff (respondent no.1) to sell land – Plaintiff instituted suit seeking possession by way of specific performance alleging that the land was agreed to be sold for Rs.1,40,000/- and he had paid Rs.69,500/- as earnest money – Plaintiff also prayed to set aside sale deed dtd.11.06.04 executed by defendant no.1 in favour of defendant no.2-appellant (purchaser of the property) and in the alternative sought for refund of earnest money and damages– Trial Court decreed the suit – Defendant no.2 filed petition to set aside the ex parte decree and for retsoration of suit – Dismissed – Eventually, Supreme Court allowed the suit to be proceeded – Relief of specific performance granted to the plaintiff – On appeal, held: Though the plaintiff examined himself, the document writer and the witness to the agreement who stated with regard to the execution of the agreement, the evidence to prove readiness and willingness with regard to the resources to pay the balance sale consideration is insufficient – Plaintiff in any event was not entitled to decree for specific performance and possession against defendant no.1 – Further, despite holding that defendant no.2 is bonafide purchaser, it cannot be lost sight of that defendant no.1 received Rs.69,500/from the plaintiff as far back as on 03.01.04 and had the transaction was concluded, the plaintiff would have been entitled to the benefit of the land – There has been considerable appreciation in the market price – Though in normal circumstance the return of the advance received and the compensation for denial of the property was to be paid by defendant no.1, however the defendant no.1 having lost interest in the property has not appeared in the instant proceedings nor is there any material to indicate that he benefited from the appreciation since even as per plaintiff he sold the property for a lesser price – In the peculiar facts of the instant case, defendant no.2 who benefited from the property will have to repay the advance and compensate the plaintiff – Decree granting the relief of specific performance as affirmed by lower appellate court and High Court is set aside – Appellant to pay Rs.3,50,000/- only to the plaintiff within three months, failing which it shall carry interest at 12% p.a. thereafter – Code of Civil Procedure, 1908 – Or. 9, r.13 and s.115 – Limitation Act, 1963 – s.5.

Partly allowing the appeal, the Court

HELD: 1.1 The suit being the one for specific performance of the contract on payment of the balance sale consideration, the readiness and willingness was required to be proved by the plaintiff and was to be considered by the Courts below as a basic requirement if a decree for specific performance is to be granted. In the present case though the plaintiff examined himself as PW1, as also PW2 and PW3, the document writer, and the witness to the agreement who stated with regard to the execution of the agreement, the evidence to prove the readiness and willingness with regard to the resources to pay the balance sale consideration is insufficient. In the absence of denial by the defendant No.1, even if the payment of Rs.69,500/- and the claim by the plaintiff of having gone to the office of Sub-Registrar on 15.06.2004 is accepted, the fact as to whether the plaintiff had notified the defendant No.1 about he being ready with the balance sale consideration and calling upon the plaintiff to appear before the Sub-Registrar and execute the Sale Deed was required to be proved. From among the documents produced and marked as Exhibit P1 to P9 there is no document to that effect, more particularly to indicate the availability of the balance sale consideration as on 15.06.2004 and as on the date of filing the suit. Despite the same, merely based on the oral testimony of PW1, the Courts below have accepted the case put forth by the plaintiff to be ready and willing to complete the transaction. Instead of arriving at an appropriate conclusion on that aspect, the Trial Court while answering the issues No.1 and 2 has concluded that the amount of sale consideration has already been paid and the fact that the Civil Suit has been filed by the plaintiff are sufficient to establish that the plaintiff remained ready and willing to perform his part of the contract. On the other hand, it is noticed that what had been paid as on the date of filing the suit was only the earnest money and the balance amount was deposited only on 03.08.2007 after the suit was decreed at the first instance on 14.06.2007 and not as on the date of filing the suit. Hence the concurrent conclusion reached by all the three Courts is an apparent error, the correction of which is necessary. Even if the amount had been deposited as on the date of filing the suit, the readiness and willingness with possession of the sale consideration as on 15.06.2004 was necessary to be proved, which was not done. Further, in a circumstance where the defendant No.2 had contested the suit and had put forth the contention that he was a bonafide purchaser without notice and through his evidence had deposed that he had no knowledge of agreement entered into between the defendant No.1 and defendant No.2, that aspect required appropriate consideration. However, the Courts below have on the contrary concluded that the defendants No.1 and 2 being of the same village, the defendant No.2 would have knowledge of the agreement entered into by the defendant No.1 in favour of the plaintiff. Such conclusion is only an assumption and there is no evidence with regard to the knowledge of defendant No.2 even if he was from the same village. [Paras 9-11] [519-D-H; 520-A-G]

1.2 In the background of the above consideration, the plaintiff in any event was not entitled to a decree for specific performance and possession of the property against the defendant No.1. Despite holding that the defendant No.2 is a bonafide purchaser, what cannot be lost sight is that the defendant No.1 had received a sum of Rs.69,500/- from the plaintiff as far back as on 03.01.2004. That apart if the transaction was concluded at that stage the plaintiff would have been entitled to the benefit of the land. Even as per the ground at (Para x) raised by the defendant No.2 in this appeal, it would indicate that there has been considerable appreciation in the market price. Though in the normal circumstance the return of the advance received and the compensation for denial of the property was to be paid by the defendant No.1, as noted, the defendant No.1 having lost interest in the property has not appeared in the instant proceedings nor is there any material to indicate that he has benefited from the appreciation since even as per the contention of the plaintiff he has sold the property for a lesser price. If that be the position, the defendant No.2 who benefited from the property will have to repay the advance and compensate the plaintiff in the peculiar facts of the instant case. In view of the above, the following order: i) The judgment and decree dated 24.07.2015 passed in Case No. 915 of 16.11.2004/17.04.2015 and affirmed by the Lower Appellate Court as also the High Court to the extent of granting the relief of specific performance is set aside. ii) The judgment and decree dated 17.04.2015 in Case No. 915 shall stand modified, and the appellant-defendant No. 2 is directed to pay a sum of Rs.3,50,000/- only to the plaintiff within three months. iii) If the amount is not paid within the time stipulated the same shall carry interest at 12% per annum thereafter. iv) The plaintiff shall be entitled to withdraw the amount of Rs.70,500/- lying in deposit before the Trial Court with the interest accrued, if any. [Paras 12, 13] [521-B-F; 522-A-D]